In a position encoder, an index mark is used to identify a fixed location within the encoder's position range. This index can be used to reset or initialize an incremental encoder's up/down counter, for example. In prior position sensors, index marks have been provided by image-plane tick marks or, as in position sensors designed by the assignee of the subject application, binary optic lenses. The difficulty with the former is that the sensing optics for the diffracted fringes and the image-plane tick marks are inherently different, making the system more complex and harder to align and tolerance. The difficulty with the latter is its limited resolution and reduced alignment tolerances.